If the amount of goodwill is ?40,000 at the beginning of a year and ?48,000 at the end of that year then while preparing cash flow statement its effect on cash flow will be :
A)cash used (payment) in investing activities ?8,000
B)cash received from operating activities ?8,000
C)cash used (payment) from operating activities ?8,000
D)cash used (payment) from financial activities ?8,000

Question

Quizplus · Accepted Answer

Goodwill is an intangible asset, and any increase in its value (from ?40,000 to ?48,000, an increase of ?8,000) would typically be reflected as cash used in investing activities, as it may indicate investment in acquisitions or similar transactions that increase the company's goodwill.

If the Amount of Goodwill Is ?40,000 at the Beginning